Forget Grexit. It's Germany that should exit the EU

AS we ponder the fate of Greece while watching our portfolios being whipsawed by a potential Grexit, we ought actually to ponder the fate of the European Union (EU) itself.

The EU traces its origins to the European Economic Community formed in the mid-1950s. The Maastricht Treaty established the EU in its current form and affirmed an "even closer union" between its member countries. It was mandated that decisions were to be made at the "EU level" rather than in Berlin, London or Paris. It was meant to be a system of supranational institutions and intergovernmental negotiated decisions by member states. It was also meant to create a unified market of 500 million inhabitants with a combined GDP of circa US$18 trillion to rival the United States of America with 350 million inhabitants and US$17 trillion in GDP. To facilitate trade flows, the euro (currency) was introduced in 2002.

For a number of years this model of the "united states of Europe" worked well. Jobs were created, European MNCs found their rightful place in the world, intra-European trade flows expanded, consumption grew, exports rebounded, the peripheral economies enjoyed unprecedented growth, poverty declined and generally the Union prospered. Indeed there was talk of the "European Dream" and that Europe would dominate the 21st century!